Ways to Save for College Without Going Broke

College gets more expensive every year, and savings plans don’t always grow as fast as costs do. Paying for college can eat up dedicated saving and move on to consuming other funds earmarked for buying a home, or even retirement.

Traditional College Savings Plans

The most common ways families save for college include:

ÂŸ 529 college saving plans

ÂŸ UGMAs (Uniform Gift to Minors Accounts)

ÂŸ UTMAs (Uniform Transfer to Minors Act)

ÂŸ Student loans

Sadly, none of these three commonly utilized savings plans can be counted on to provide funds when you need them. A 529 can lock funds away if plans change and your child decides not to go to college. The funds could be unavailable until you reach age 60, or you could pay huge penalties for using the money -- your money -- for anything other than college.

In contrast, UGMA and UTMA plans put control of funds in the hands of the potential student, taking control away from you and making it hard to ensure the funds are used as intended. Student loans direct money to the college of choice, but can leave graduates owing tens of thousands of dollars, making it difficult to pay off debt.

An Alternate Form of College Funding

There is another option for those seeking to save for college but who still have flexibility in case plans change. A specially designed, dividend-paying type of whole life insurance policy that includes specific riders can increase cash value yearly at a guaranteed rate, and avoid the insecurity of depending on a fluctuating stock market.

With this specific type of whole life policy, cash value can grow up to 40 times faster than a traditional life insurance plan. In addition, your funds are safe and you’ll never lose principal or gains due to a shift in the market. You’ll always know exactly how much you have saved towards college.

Still Get Financial Aid

Another benefit to using a whole life insurance policy to save for college is that the funds are not reported as assets on the Free Application for Federal Student Aid (FAFSA) and cannot be counted against you in the calculations for financial aid or scholarships.

ÂŸ The knowledge of exactly how much you have available at any given time

ÂŸ Access to your funds whenever or for whatever reason you need them -- penalty and tax free.

Putting money into a whole life insurance policy is the perfect way to save for college, and lets you have control of the future, whatever it holds. If your child chooses college, you’ll have funding available; if not, you’ll still have access to your savings for other purposes, like a car, or a start on your early retirement fund!